Banks Big Picture

How can Fintechs trust their customers in 2018?

We can now complete the mortgage process with a selfie. We unlock our phones with facial recognition and we can open digital bank accounts in minutes. The sharing economy is a normal part of daily life, and people want access to goods and services at the tap of a thumb.

With more than half of UK millennials now choosing mobile banking apps, the future of personal finance isn’t in traditional bricks and mortar institutions. Banks can no longer guarantee the loyalty of long-standing customers as many are willing to move for better rates and service. And as we all know, moving is easy when you’re motivated to do so.

What has resulted? The Fintech and challenger bank landscape is a highly competitive one. With more and more consumers choosing these services, how can companies built on innovation continue to stay ahead?

Being able to trust customer identities in seconds in a truly digital environment is what will enable Fintechs to continue to break down global borders and provide the best and most secure experience for consumers. In a world where hacks are commonplace and data breaches are considered inevitable, trust in identity can no longer remain linked to static data.

Globalisation and digitalisation mean we can now build services for consumers at a global level, without geographical boundaries. By 2019, there will be over 5 billion mobile phone users in the world. How though can we trust these billions of potential unique customers?

They are identifiable by four categories of identity data:

  • Attributed – also known as ‘traditional’ data. This includes static data, such as physical address, passport and driving licence documents, National Insurance or Social Security number, electoral roll listing, and bank account and credit card details. It continues to provide a critical foundation in establishing identity.
  • Digital – what does an individual’s digital identity consist of? What devices can be identified as theirs and can you link their network of devices? For example, are they making an application from their device?
  • Behavioural – How people interact both online and offline. Patterns of activity provide rich insight into whether an identity can be trusted.
  • Biometrics – Using technology to decide whether a person physically mirrors who they say they are.

Fuelled by alternative data sources, a modern identity is constantly updated based on the biometric, digital and behavioural data available from our daily activity. To truly authenticate an individual in a global and digital world, attribute data should be combined with other sources, with the key being in successfully correlating the data points.

It is crucial that the data underpinning identity solutions provides both certainty and trust in the consumer. This is achieved by supporting all aspects of today’s transient identity. Knowing an individual’s name, address and date of birth will no longer be sufficient; it needs to be layered with the individual’s digital credentials, linked to their behaviour and authenticated using their biometrics.

In order for Fintechs to trust their customers, and indeed, for customers to trust Fintechs, there needs to be transparency when it comes to use of customer data. With the four layers working together, a business can achieve a reliable, compliant and efficient approach to validating identities. By using technology, Fintechs and challengers can layer all the components to not just fight fraud, but significantly improve the customer journey for good customers.

By Glenn Porter, Managing Director, GBG

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